Montgomery County v. Schultze

MURPHY, Chief Judge. At issue in this case is the validity of a special assessment levied against properties abutting a road improvement project in Montgomery County, Maryland. I Montgomery County Code (1977 Repl.Vol.), § 49-37 provides: “(a) No road shall be constructed by the county, whether on force account or by contract or both, unless ... the cost of the road is to be charged against the benefited property in accordance with sections 49-51 to 49-61 and subsection (b) of this section____ (b) Whenever a road is constructed as a ‘front foot assessment’ project, pursuant to sections 49-51 to 49-61, the portion of the cost chargeable and assessed to the benefited abutting properties shall be all costs of construction, including costs of acquisition of land or interest therein, for right-of-way. ⁴⁸⁴ (c) All costs in excess of the special benefit to the abutting property or otherwise waived in this article shall be borne by the county.” Section 49-52 provides that whenever county road construction is authorized, the cost shall be assessed “as a benefit to all property adjacent to the right-of-way of such road and specially benefited by the construction thereof; provided, that: (a) ... (b) No such property shall be assessed in excess of the amount by which such property is specially benefited by such construction.” Section 49-55 provides that the County Council shall, by resolution: “assess the costs of the road project against the adjacent properties pursuant to the county road construction code in force at the time and subject to the limitations of section 49-52.

Such assessments shall be computed on the basis of the linear frontage of such properties except as otherwise provided in section 49-56 and in the road construction code.” Pursuant to these statutory provisions, the Montgomery County Council, having determined that a public need existed to widen Randolph Road between Parklawn Drive and Rockville Pike, authorized completion of the work and the imposition of an assessment upon the specially benefited properties abutting the roadway project. The assessments were calculated according to the front-foot formula by determining each abutting property’s proportionate share of the entire construction cost. Twenty-five properties contained frontage on the improved roadway. Nineteen were privately owned and were used for light industrial and commercial purposes; six properties were state owned or otherwise exempt from assessment.

In the front-foot calculation, 60 percent of the total costs of construction were allocable to the exempt properties; their proportionate ⁴⁸⁵ share of the total cost of construction was paid by the County. II Under the front-foot assessment formula authorized by §§ 49-37(b) and 49-55, Edward Schultze and Maurice Berk, as abutting property owners, were assessed, respectively, the amounts of $19,378.10 and $43,499.33. Each appealed to the Circuit Court for Montgomery County; they alleged, among other arguments, that some, if not all, of the benefit of the road improvement project accrued to the public in general, and that it was thus improper to assess the total construction costs as a special front-foot benefit to the abutting property owners. The circuit court (Bell, J.) concluded that the assessed properties were in fact specially benefited by the project.

It also found that there was a public need for the road improvement and that the public benefited from it. It further found that the County absorbed 60 percent of the total construction costs allocable under the front foot method to the exempt properties, but that no part of that amount reflected any costs “attributable to a public benefit.” Consequently, the circuit court remanded the case to the County Council to “adjust the front-foot assessment accordingly.” The County appealed claiming that the circuit court had in effect judicially repealed §§ 49-37 and 49-52 by establishing a new prerequisite to the authority of the County Council to levy a special benefit assessment in that the total cost of a road project could no longer be assessed against the abutting property owners but must be apportioned between the specially benefited properties and the public at large. Finding no merit in the County’s arguments, the Court of Special Appeals affirmed, with modifications. Montgomery County v. Schultze, 57 Md.App. 781 , 471 A.2d 1129 (1984). ⁴⁸⁶ The intermediate appellate court concluded, after an extensive review of our cases, that “where the primary purpose of the improvement is not to confer a special benefit upon the adjacent property, ... the predominate general benefit and public purpose for the improvement must be a predicate consideration in determining whether and what the special benefit assessable to each abutting property is to be.” 57 Md.App. at 790 , 471 A.2d 1129 .

The court said that the purpose of the construction in this case was not to confer a special benefit on the adjacent properties but rather to enhance Randolph Road’s utility as a cross-county connector road, replacing the need for a long proposed freeway. Id. It interpreted §§ 49-37 and 49-52 to require “some apportionment of the total costs to the public whose interest is in this case the primary consideration for the construction.” Id. at 794, 471 A.2d 1129 . It said that the record did not disclose “that apportioning the costs was ever considered.” Id.

It said that the enhanced benefit to the property by reason of proximity alone is not sufficient to require the more proximate taxpayers to shoulder the entire cost of a project purposed generally to be beneficial to, and primarily used by, the public at large. Id. at 795 , 471 A.2d 1129 . That may be permissible, the court said: “when the purpose of the improvement is to confer a special benefit on the adjacent properties____ If the statute does not allow for some division of costs to reflect general public participation where the improvement is more clearly for the public (rather than a particular district or the adjacent property owners), the record must reflect that public cost participation was contemplated and to some degree apportioned by the council when a want of any apportionment is judicially raised.” Id. Section 49-37(b) did not, the court observed, provide for “any apportionment between public general funds and specially benefited adjacent property assessments,” id. at 797 , 471 A.2d 1129 , but § 49-37(a) required that the road construction costs be charged against the benefited properties “ ‘in accordance with sections 49-51 to 49-61 and subsection ⁴⁸⁷ (b) of this section.’ ” Id. at 801, 471 A.2d 1129 .

Reading the statutes in pari materia, the court said that the County Council did not intend that the costs chargeable to the benefited abutting properties would necessarily be all costs of construction but rather that § 49-37(b) was intended merely “as a cap not a mandated starting point.” Id. at 801, 471 A.2d 1129 . It found that the County Council based its assessment on the recommendation of a county appraiser, which was “arbitrary, unfounded and [based upon an] improper interpretation of the statutes.” Id. at 800 , 471 A.2d 1129 . The court pointed out that the appraiser simply determined to apply the front-foot assessment rule to all costs of construction, as equalling the special benefit to the abutting properties. Thus, the court said, that notwithstanding the provision of § 49-52(b)—that no property shall be assessed in excess of the amount by which such property is specially benefited as a result of such construction—the appraiser “implicitly mandated what constitutes the total special benefits which he thought were mandated as being the total amount of the assessment.” Id. at 799, 471 A.2d 1129 .

The court continued: “The 'special benefit’ in the appraiser’s mind has by fiat become the cost of the project which eliminates the necessity of determining the real value of the improvement to the property abutting, beyond its benefit to the public generally. His interpretation of §§ 49-37(a) and (b) leaves § 49-52(b) without any meaning. Such an absurd intention we may not attribute to a legislative body.” Id. at 799-80, 471 A.2d 1129 . The Court of Special Appeals emphasized that no part of the 60 percent total construction costs absorbed by the County on account of the nonassessable properties was attributable to the public benefit and that, as a consequence, the nineteen specially benefited property owners were assessed “whatever was necessary to provide a road, the existence of which is necessarily justified by general public interest, need and convenience as well as being considered an extension of a cross-county thoroughfare.” ⁴⁸⁸ Id. at 800-01 , 471 A.2d 1129 .

The court said that because, for assessment purposes, a public benefit is too great an abstraction to quantify, it would be more appropriate on remand to the County Council for the Council to first determine the private benefit and then apply it to the costs of construction. Id. at 802 , 471 A.2d 1129 . As to this, the court said that such benefits apportioned on a front-foot basis under § 49-55 could be all construction costs, “but in no case could the assessment to any property exceed the value by which the property is actually specially benefited by the construction,” with the balance being paid by the County. Id.

Thus, the court said, “by determining the benefit and applying it to the cost, rather than determining the costs to be the benefit, there may indeed be other costs for the County to bear.” Id. The court concluded: “The apportioning of the assessment